Social and Behavioral Sciences Commons^™

Household Saving In The '90s: Evidence From Cross-Section Wealth Surveys, John Sabelhaus, Karen M. Pence

Karen M. Pence

This paper uses a series of cross-section surveys to measure how wealth accumulation and active saving rates varied across cohort-groups during the early and mid 1990s. Our estimated rates of saving and wealth change across cohorts show a somewhat more dramatic life-cycle pattern than found in previous studies, in part because we use a new technique, and in part because the cross-section wealth surveys we use oversample the wealthiest families whose behavior dominates aggregate changes. Adjusting the wealth-change rates for bequests and subtracting out the capital gains component of wealth change move the estimates in the direction of results from …

Selección Empírica Para El Desarrollo Económico Regional, Vicente German-Soto

Vicente German-Soto

Affidavit Of Peter Cramton, Peter Cramton

Peter Cramton

Summary of review of reserves and operable capability markets. For ISO New England.

Timing Of Seasonal Sales, Pascal Courty, Hao Li

hao li

We present a model of timing of seasonal sales where stores choose several designs at the beginning of the season without knowing which one, if any, will be fashionable. Fashionable designs have a chance to fetch high prices in fashion markets while non-fashionable ones must be sold in a discount market. In the beginning of the season, stores charge high prices in the hope of capturing their fashion market. As the end of the season approaches with goods still on the shelves, stores adjust downward their expectations that they are carrying a fashionable design, and may have sales to capture …

Dynamic Scale Economies, Specialization, And The Cost Of The Single Currency, Luca De Benedictis, Piercarlo Padoan

Luca De Benedictis

The paper explores the effect of exchange rate policy, labour market intervention and technological change on the structure of the Ricardian specialization of countries in presence of Economies of scale and learning-by-doing. The model is developed with the EU in mind.

Creating And Enforcing Norms, With Special Reference To Sanctions, Eric Bennett Rasmusen, Richard A. Posner

Eric Bennett Rasmusen

Two central puzzles about social norms are how they are enforced and how they are created or modified. The sanctions for violation of a norm can be categorized as automatic, guilt, shame, informational, bilateral- costly, and multilateral-costly. Problems in creating and enforcing norms are related to which sanctions are employed. We use our analysis of enforcement and creation of norms to analyze the scope of feasible government action either to promote desirable norms or to repress undesirable ones.

Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data, Gilbert E. Metcalf, Kevin A. Hassett

Gilbert E. Metcalf

An important factor driving energy policy over the past two decades has been the "energy paradox," the perception that consumers apply unreasonably high hurdle rates to energy-saving investments. We explore one possible explanation for this apparent puzzle: that realized returns fall short of the returns promised by engineers and product manufacturers. Using a unique data set, we find that the realized return to attic insulation is statistically significant, but the median estimate (9.7%) is almost identical to a discount rate for this investment implied by a CAPM analysis. We conclude that the case for the energy paradox is weaker than …

An Alternative Tale Of Two Tax Jurisdictions: A Reply, Robert L. Sexton, Gary Galles

Robert L Sexton

ABSTRACT. Cebula (1999) suggests that the success of California's Proposition 13 and Massachusetts' Proposition 2-1/2 is better judged by their effects on the growth rates of real per capita revenues and expenditures rather than on the te^ek of those variables, which Galles and Sexton (1998) used to evaluate those measures. However, the data shows that virtually all of their effects, relative to the United States as a whole, arose during their implementation periods, and that there is no clear evidence of the "longer term success in terms of reducing the growth rate of real per capita revenues and expenditures" that …

Hierarchies And Information-Processing Organizations, Hao Li

hao li

This paper analyzes organizational structures that minimize information processing costs for a specific organizational task. Organizations consist of agents of limited ability connected in a network. These agents collect and process information, and make decisions. Organizations implement strategies---mappings from environmental circumstances to decisions. The strategies are exogenously given from a class of "pie"' problems to be defined in this paper. The notion of efficiency is lexicographic: the primary criterion is minimizing the number of agents, and the secondary criterion is minimizing the number of connections between the agents. In this modeling framework, efficient organizations are not hierarchical for a large …

Investment With Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?, Gilbert E. Metcalf, Kevin A. Hassett

Gilbert E. Metcalf

The authors consider the impact of tax policy uncertainty on firm level and aggregate investment, comparing investment behavior when uncertainty is due to a shock following geometric Brownian motion (GBM) versus when random discrete jumps in tax policy occur. Expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty. Aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional GBM model but can be enhanced in the jump …

A Coalfield Tapestry: Weaving The Socioeconomic Fabric Of Women's Lives, Ann M. Oberhauser, Anne-Marie Turnage

Ann Oberhauser

Market-Based Transfer Prices And Intracompany Discounts, Aaron S. Edlin, Tim Baldenius, Stefan Reichelstein

Aaron Edlin

No abstract provided.

Victims As Cost Bearers, Richard Adelstein

Richard Adelstein

A brief recasting of the price exaction model.

Does Mother Nature Punish Rotten Kids?, Ted Bergstrom, Carl Bergstrom

Ted C Bergstrom

The theory of parent-offspring conflict predicts that mothers and their offspring may not agree about how resources should be allocated among family members. A kid, for example, may favor a later weaning date than does its mother. Despite the mother's physical superiority, it may be that the kid is able to manipulate her behavior. In this paper, we investigate a two-locus population genetic model of weaning conflict in which offspring can attempt to extort resources from their parents by reducing their own chances of survival if their demands are not met. We find that the frequency of recombination between the …

Consumption Adjustment Under Time-Varying Income Uncertainty, Douglas Steigerwald, Joon-Ho Hahm

Douglas G. Steigerwald

We study the effect of income uncertainty on consumption in a model that includes precautionary saving. In contrast to previous studies, we focus on time-series variation in income uncertainty. Our time-series measure of income uncertainty is constructed from a panel of forecasts. We find evidence of precautionary saving in that increases in income uncertainty are related to increases in aggregate rates of saving. We also find evidence that anticipated income growth rates have less explanatory power for consumption growth rates after conditioning on income uncertainty. The evidence indicates the presence of forward-looking consumers who gradually adjust precautionary savings in response …

Racial Discrimination In ‘Everyday’ Commercial Transactions: What Do We Know, What Do We Need To Know, And How Can We Find Out?, Peter Siegelman

Peter Siegelman

No abstract provided.

Amenities And Fringe Benefits: Omitted Variable Bias, Philip E. Graves, Robert L. Sexton, Michelle M. Arthur

Robert L Sexton

If labor is fairly mobile, as it is in the United States, one would expect that households would move from less desirable areas toward more desirable areas until all areas are equally desirable. The way that areas become equally desirable is through the impact of movers on wages and rents (and possibly "endogenous" disamenities, such as congestion or pollution). That is, as people move to desirable areas, they will increase the demand for land (raising rents) and increase the supply of labor (lowering wages); in equilibrium, the wage and rent "compensation" for the niceness of an area reveals, in dollar …

The Origins Of Property And The Powers Of Government, Richard Adelstein

Richard Adelstein

The alternating influence of Locke and Bentham in American constitutional law.

State Mental Health Parity Laws: Cause Or Consequence Of Differences In Use?, Rosalie Liccardo Pacula, Roland Sturm

Rosalie Liccardo Pacula

No abstract provided.

Mongolia: Avoiding Tragedy In The World's Largest Commons, Robert D. Cooter

Robert Cooter

In Mongolia 300,000 nomadic people herd 25 million animals over an unfenced area twice the size of France. Current economic theories assert that efficiency requires privatizing land until the savings from reduced congestion equal the costs of exclusion. However, the fundamental tradeoff in Mongolia is different. In Mongolia, privatization solves the problem of congestion at the cost of aggravating the problem of spreading risk. Assigning exclusive use-rights over particular pastures to families solves the problem of congestion among herds and increases the transaction costs of moving the herds across climatic zones in response to inclement weather. Thus efficiency requires privatizing …

A Distributional Analysis Of Green Tax Reforms, Gilbert E. Metcalf

Gilbert E. Metcalf

I measure the distributional impact of a shift toward greater reliance on environmental taxes (a green tax reform) using both annual and lifetime income measures to rank households. An environmental tax reform can be designed that has a negligible impact on the income distribution when the funds are rebated to households through reductions in the payroll tax and personal income tax. I also analyze trade-offs among competing goals of efficiency, equity, and ease of administration in the design of a green tax reform.

The Irrelevance Of The Double Dividend, Don Fullerton, Jane Gravelle

Don Fullerton

This paper reviews five or more problems with the whole concept of the "Double Dividend Hypothesis." First, it is not well defined. Second, the usual theoretical models cannot answer this empirical question. Third, they also cannot say whether a double dividend is likely or unlikely. Fourth, the number of dividends does not matter (four dividends may add up to less welfare than one big dividend). Fifth, the simple analytical models cannot address the complexity of the issue.

Distributional Impacts Of Proposed Changes To The Social Security System, Julia Coronado, Don Fullerton, Thomas Glass

Don Fullerton

In this paper we assess the degree to which the current social security system redistributes income from rich to poor. We then estimate the impact of various proposed changes to social security on the overall redistributive effect of the system. Our analysis takes a steady-state approach in which we assume participants work their entire lives and retire under a given system. Redistribution is measured on a lifetime basis using estimated earnings profiles for a sample of people taken from the PSID. We allow for differential mortality, not only by gender and race, but also by lifetime income. Our results indicate …

Demand For Ground Transportation Fuel And Pricing Policy In Asian Tigers, Ujjayant N. Chakravorty, Sara Banaszak, Pingsun Leung

Ujjayant Chakravorty

This paper examines the demand for gasoline and diesel in the ground transportation sectors of Korea and Taiwan, comparing the effects of their different pricing policies and stages of economic growth.

Regional Economic Governance Series (Five Articles In A Weekly Series), Daila Shimek, Kevin O'Brien, Susan Petrone

Daila Shimek

No abstract provided.

A Comparison Of Welfare Estimates From Four Models For Linking Seasonal Recreational Trips To Multinomial Models Of Site Choice, George R. Parsons, Ted Tomasi, Paul Jakus

George Parsons

Familiar And Favorite Sites In A Random Utility Model Of Beach Recreation, George R. Parsons, Daniel Mathew Massey, Ted Tomasi

George Parsons

No abstract provided.

State Mental Health Parity Laws: Cause Or Consequence Of Differences In Use?, Rosalie Liccardo Pacula, Roland Sturm

Roland Sturm

No abstract provided.

Measures Of Welfare Effects In Multiproduct Industries: The Case Of Multispecies Individual Quota Fisheries, Niels Vestergaard

Niels Vestergaard

A framework is developed to measure the welfare effects of individual quota reforms in multiproduct industries using the multimarket welfare measure techniques suggested by Just, Hueth, and Schmitz (1982) and the concept of virtual price in the production theory literature (Neary 1995; Squires and Kirkley 1996). Under joint in input production it shown that quasirent under a single quota can be measured by the producer surplus either in the output market for quota output or in the quota market. Under multiple quotas the welfare effects of quota policies can be measured in one of the quota markets using inverse derived …